Community Based Health Financing

 

Description:

CBHF aims to meeting community's financing needs through pooling of resources to pay for health care as a group.

 

I) STRENGTHS/ WEAKNESSES

 

Strengths:

-The extent of outreach penetration achieved through community participation

-Contribution to financial protection against illness

-Increase in access to health care by low-income rural and informal sector workers

-Increase in utilization of health services

-Reduce cost of health care per person

-Increased sense of investment and ownership of community members in their health care

 

Weaknesses

-The low volume of revenues that can be mobilized from poor communities

-The frequent exclusion of the very poorest from participation in such schemes without some form of subsidy

-The small size of the risk pool

-The limited management capacity that exists in rural and low-income contexts

- Isolation from the more comprehensive benefits that are often available through more formal health financing mechanisms and provider networks

-Risk selection if membership is voluntary – sicker people more likely to buy insurance

-Financial sustainability for chronic conditions (e.g. HIV) that is more costly

-People might not have money to pay out of pocket for premiums regularly to offset the risk of ending to pay large health care fees upon falling sick (even modest premiums can be too high for the poorest to pay, simply to defray the possibility of future health care costs)

 

sources:

http://publications.worldbank.org/ecommerce/catalog/product?item_id=1230886

 

II) POTENTIAL APPLICATION FOR NYAYA

 

A. Issues to consider

-What services should/can be covered under the insurance?

-Can community based health insurance sustain?

-Can the insurance generate enough income to cover the cost of medical services not covered by other sources?

-How can we prevent people at lower-risk dropping out?

-How can we control overuse of services?

-Who manages and collects the money?

-How can we monitor fraud?

-How do we ensure that the system does not deter patients from joining the insurance program and/or using the clinic when in need?

-Will people even be coming in to the clinic? Who’s using it? What services?

-Form a committee and ask the community to come up with their solutions or options?

 

B. Possible ways to address issues/problems

-to improve financial accessibility, government and philanthropic organizations (e.g. religious institutions, external donors) can subsidize premiums for the very poor

-CBHF have “solidarity funds” whereby small mark-ups on premium are used to provide low-cost or free membership to the very poor (e.g. 5% of total membership)

-sliding scales for premiums based on income

-have savings scheme for households to set aside small amounts over a period of time in order to pay their premiums

 

 

C. Possible Financial Structures

-Pre-payment

            Out of pocket charge paid by an uninsured individual at time of seeking care.

--Insurance:

            Voluntary and contributory schemes for the community handling small-scale cash flows to address community risks; may encompass a variety of different types of risks, including the

            risk of health care expenditures. See section on Microfinance.

-Payment in kind:

 

            Payment for health services that are not in the form of cash but commodities (e.g. crops) or labor. See the section on Alternative Financing.

 

World Bank Descriptions of Financial Structures (from http://go.worldbank.org/SEYRG5C5K0)

 

 

(a) Community cost-sharing. In these types of arrangements, the community participates in mobilizing resources for health care through user fees. The health financing instrument in this case is out-of-pocket payments but the community is involved in setting user fee levels, allocating the collected resources, developing and managing exemption criteria, and general management and oversight. The community may also be involved on management of at least the first level of health care, the health centers, through participatory structures. The most important characteristics that distinguishes this type of financing arrangement from the other 3 modalities is the lack of pre-payment and risk sharing. The Bamako initiative is a good illustration of this kind of health financing mechanism.

 

(b) Community prepayment or mutual health organizations. These schemes are characterized by voluntary membership, pre-payment of usually a one-time annual payment, and risk-sharing. Some of these schemes cover catastrophic benefits (including hospital care and drug expenditures) others do not. The community is strongly involved in designing and managing the scheme. Schemes are typically not-for-profit. Examples include: Grameen Health Plan in Bangladesh, Boboye District Scheme in Niger. (The "Concertation" initiative –www.concertation.org –provides a census of MHO in francophone Africa).

 

(c) Provider based health insurance. These schemes are often centered around single provider units such as town or city or regional hospital. They are characterized by voluntary membership, pre-payment of usually a one-time annual payment, risk-sharing, and coverage of catastrophic risks. They are often started up by the providers themselves or through donor support. The involvement of the community is often more supervisory than strategic. Examples include: Bwamanda Hospital insurance scheme in the Democratic Republic Congo, Nkoranza Community Health Financing Scheme in Ghana.

 

(d) Government or social insurance supported community driven scheme. These community based health financing schemes are attached to formal social insurance arrangements or government run programs. The community actively participates in running the scheme but the government (Thailand) or the social insurance system (Ecuador) contributes a significant amount of the financing. These schemes are not always voluntary (Burundi) and some have referred to this category as district or regional health insurance. Often such financing initiatives are initiated by the government and not the community. Examples include Ecuador's Seguro Social Campesino.

 

 

D. Steps in Establishing CBHF

 

1. Inform and educate the population on the concept of CBHF schemes.

2. Establish a working group in the community to oversee the process of starting a CBHF

scheme.

3. Conduct a feasibility study with technical assistance providers and the CBHF scheme

working group.

4. Establish several benefits package options.

5. Disseminate the results of the feasibility study to the target population.

6. Convene a general assembly to agree on the benefits package, premiums, and operational

modalities.

7. Require a waiting period before members can begin to use the CBHF scheme.

8. Strengthen the CBHF scheme during the waiting period (membership campaign, member

education, provider contracts).

9. Begin full operation of the CBHF scheme.

 

Above steps taken from the procedure used by PHRplus regional technical advisors and their community

partners in West Africa to set up CBHF schemes. (http://www.phrplus.org/Pubs/sp11.pdf)

 

 

III) SAMPLE MODELS IN OTHER PLACES

 

 

a. Uganda

Title: An Assessment of Community-Based Health Financing Activities in Uganda (Feb 2005)

By: USAID

Summary:

Aims:collect basic information about currently funcioning CBHF schemes and support organizations in Uganda, identify best practices and examine key obstacles

methods: key informant interviews, focus groups, review of documents

findings: see pg 33-35 of report for best practices, key obstacles, & recommendations

http://www.phrplus.org/Pubs/Tech060_fin.pdf

 

b. India

Title: Design of Incentives in Community Based Health Insurance Scheme

By: Indian Council for Reserach on International Economic Relations

Aims: This paper discusses solutions to important incentive problems in micro-health insurance schemes which threaten their sustainability. In particular, three issues explored are : (i) if defining household as unit of insurance always mitigates adverse selection problem; (ii) how ex ante moral hazard problem can be circumvented through group insurance contract; and (iii) how to set incentives for scheme managers. Various public policies are discussed that help to set appropriate incentives to better manage health insurance schemes in low-income country environments. 

methods: modeling?

findings:

-Ways to mitigate adverse selection & moral hazard is different

-See pg. 33-34

-Compared informal insurance vs. market insurance

-“To sum up, we find that household as unit of insurance is not always superior to defining individual as membership unit. Therefore, in defining appropriate unit of insurance the characteristics of target population are important.”

-“A potential solution to encourage preventive action in a low-income community is not through co-payments or deductibles as it is suggested to deal with ex-post moral hazard but through a group contract designed to induce peer monitoring by limiting the number of claims.”

http://www.icrier.org/pdf/WP-95.pdf

 

 

c. India

Title: The feasibility of a Community Based Health Insurance (CBHI) at Wayanad, Kerala http://www.srtt.org/downloads/healthfinancingforpoor-report.pdf

description:

-have details of some health insurance policies for the poor

-3 models of CBHI in india

1. Provider Model: a provider (usually a NGO hospital) provides health insurance for the community around

2. Insurer model: NGO takes the role of insurer, collects money from the community and purchases health care for its members

3. Linked model:NGO collects premium, but passes it onto a formal insurance company; company then takes the risk of running the insurance

 

aims: feasibility study: 1) to understand whether a community health insurance would be feasible in the 4 panchayats of Wayanad district 2) To understand the conditions for a community health insurance to be feasible 3) To determine the CBHI model that would be optimal for the given conditions

methods: focus group, survey with providers, interviews, census data, seminar

results: p32 for recommendations

 

d. Nepal

Krishna Man Shakya of the Lalitpur Medical Insurance Scheme.

 

 IV) POSSIBLE CONTACTS

a. Yale

elizabeth.bradley@yale.edu - health management program director (http://publichealth.yale.edu/faculty/bradley.html)

hong.wang@yale.edu - community based health financing in china

 

b. Nepal

 

 

c. Worldwide

-Professor teaching health financing

E-mail: Shepard@Brandeis.edu, Tel: 781-736-3975

Web: http://www.sihp.brandeis.edu/shepard

Draft syllabus: 

http://64.233.169.104/search?q=cache:28oEFKQAmvMJ:people.brandeis.edu/~shepard/health-fin-syllabus-2005f.doc+employee+based+insurance+developing+world&hl=en&ct=clnk&cd=4&gl=us

 

 

d. Organizations

-USAID: people listed in the Uganda assessment report: http://www.phrplus.org/Pubs/Tech060_fin.pdf

 -PHRplus: http://www.phrplus.org/about_new.html

 

V) Additional Sources

 

Excellent article on CBHI in india

http://www.prb.org/Articles/2006/CommunityBasedHealthInsuranceShowsPromiseinIndia.aspx

 

 WHO community based health insurance

 

http://www.who.int/health_financing/mechanisms/en/index4.html

 

World Bank: Community based financing background

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTHEALTHNUTRITIONANDPOPULATION/EXTHSD/0,,contentMDK:20190566~FirstTime:True~menuPK:431645~pagePK:148956~piPK:216618~theSitePK:376793,00.html

 

 

Info from world bank on Nepal:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/NEPALEXTN/0,,menuPK:148707~pagePK:141159~piPK:141110~theSitePK:223555,00.html

-has some info. on current projects going on

- has publications:

access to financial services in nepal :http://siteresources.worldbank.org/INTNEPAL/Resources/Access_to_Financial_Services_in_Nepal.pdf

 -Choosing, designing, and implementing programs

-Delivery mechanisms and institutional issues

-Financing and cost effectiveness

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTHEALTHNUTRITIONANDPOPULATION/EXTHSD/0,,contentMDK:20190495~FirstTime:True~menuPK:431645~pagePK:148956~piPK:216618~theSitePK:376793,00.html

- poverty reduction strategies

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPRS/0,,menuPK:384207~pagePK:149018~piPK:149093~theSitePK:384201,00.html

Nepal: lots of background info.

http://siteresources.worldbank.org/INTPRS1/Resources/Country-Papers-and-JSAs/cr07176.pdf

 

 

Additional readings from a syllabus:

http://64.233.169.104/search?q=cache:28oEFKQAmvMJ:people.brandeis.edu/~shepard/health-fin-syllabus-2005f.doc+employee+based+insurance+developing+world&hl=en&ct=clnk&cd=4&gl=us

 

 

community financing:

http://www.eldis.org/go/topics/dossiers/meeting-the-health-related-needs-of-the-very-poor/health-related-strategies-for-reaching-the-poor/community-based-health-financing-schemes

 

PHRplus: USAID looks to PHRplus to provide technical assistance in, and to help maintain, USAID’s worldwide leadership role in health care reform, health policy, management, health financing, and systems strengthening.

http://www.phrplus.org/about_new.html

http://www.phrplus.org/cbhfpubs.html

 

 

 

Summary of literature on community-based health financing schemes based on nature of study and by region

Conceptual studies

1.       Dror D et al. 1999. “Micro-insurance: extending health insurance to the excluded” 2.       Brown W et al. 2000. “Insurance Provision in Low-Income Communities-Part II. Initial lessons from Micro-insurance Experiments for the Poor.” 3.       Ziemek S et al. 2000. “Mutual Insurance Schemes and Social Protection.” 4.       Criel B. 2000. “Local Health Insurance systems in developing countries: a policy research paper.” 5.       Ekman B. 2001. “Community-based Health Insurance Schemes in Developing Countries: Theory and Empirical Experiences.” 6.       Hsiao WC. 2001. “Unmet needs of 2 billion: Is Community Financing a Solution?”

Large scale comparative studies (> 5 schemes)

7.       Dave P. 1991. “Community and self-financing in voluntary health programmes in India.” 8.       McPake B et al. 1993. “Community Financing of Health Care in Africa: An Evaluation of the Bamako Initiative.” 9.       Gilson L. 1997. “The lessons of user fee experience in Africa.” 10.   Atim C. 1998. “Contribution of Mutual Health Organizations to Financing, Delivery, and Access to Health Care.   Synthesis of Research in Nine Western and Central-African  Countries.” 11.   Bennett S et al. 1998. “Health Insurance Schemes for People outside Formal Sector Employment.” 12.   Musau SN. 1999. “Community-based health insurance: Experiences and Lessons learned from East and Southern Africa.”    13.   CLAISS. 1999. “Synthesis of Micro-insurance and other forms of extending social protection in health in Latin America and the Caribbean.” 14.   Narula IS et al. 2000. “Community Health Financing Mechanisms and Sustainability: A Comparative Analysis of 10 Asian Countries.”

Case studies – AFRICA

15.   Arhin, D. 1994. “The Health Card Insurance Scheme in Burundi: A social asset or a non-viable venture?” 16.   Diop FP et al. 1994. “Evaluation of the Impact of Pilot Tests for Cost Recovery on Primary Health Care in Niger.” 17.   Arhin DC. 1995. “Rural Health Insurance: A Viable Alternative to User Fees.” 18.   Diop F et al. 1995. “The impact of alternative cost recovery schemes on access and equity in Niger.” 19.   Ogunbekun I, Adeyi O, Wouters A and Morrow RH. 1996. “Costs and Financing of improvements in the quality of maternal health services through the Bamako Initiative in Nigeria.” 20.   Roenen C et al. 1997. “The Kanage Community Financed Scheme: What can be learned from the failure?” 21.   Soucat A et al. 1997. ‘’Health seeking behavior and household expenditures in Benin and Guinea : The Equity implications of the Bamako Initiative.” 22.   Soucat A et al. 1997. “ Local cost sharing in Bamako Initiative Systems in Benin and Guinea :Assuring the Financial Viability of Primary Health Care.” 23.   Atim C. 1999. “Social movements and health insurance : a critical evaluation of voluntary, non-profit insurance schemes with case studies from Ghana and Cameroon.” 24.   Criel B et al. 1999. “The Bwamanda hospital insurance scheme: effective for whom? A study of its impact on hospitalization utilization patterns.” 25.   Atim C et al. 2000. “An External Evaluation of the Nkoranza Community Financing Health Insurance Scheme, Ghana.” 26.   Jütting J. 2000. “Do mutual health insurance schemes improve the access to health care? Preliminary results from a household survey in rural Senegal.” 27.   Schneider P et al. 2000. “Development and Implementation of Prepayment Schemes in Rwanda.” 28.   Gilson L et al. 2000. “The Equity Impacts of Community Financing Activities in three African Countries.”  29.   Okumara J et al. 2001. “Impact of Bamako type revolving drug fund on drug use in Vietnam.”

Case studies – ASIA

30.   Hsiao WC. 1995. “The Chinese Health Care System: Lessons for other Nations.” 31.   Ron A et al. 1996. ‘’A Community health insurance scheme in the Philippines: extension of a community based integrated project.” 32.   Liu Y et al. 1996. “Is community financing necessary and feasible for rural China?” 33.   Supakankunti, S.  1997.  “Future Prospects of Voluntary Health Insurance in Thailand.” 34.   Supakankunti S. 1998. “Comparative Analysis of Various Community Cost Sharing Implemented in Myanmar.”  35.   Carrin G et al. 1999. ‘’The reform of the Rural Cooperative Medical System in the People’s Republic of China: interim experience in 14 pilot counties.” 36.   Desmet A et al. 1999. “The potential for social mobilization in Bangladesh: the organization and functioning of two health insurance schemes.” 37.   Chen N et al. 2000. ‘’Study and Experience of a Risk-based Cooperative Medical System in China : Experience in Weifang of Shandong province.” 38.   Gumber A et al. 2000. “Health insurance for informal sector: Case study of Gujarat.” 39.   Xing-yuan G et al. 2000. “Study on Health Financing in Rural China.” 40.   Preker, A.  2001.  “Philippines Mission Report.

Case studies – LATIN AMERICA AND THE CARIBBEAN

41.   Toonen, J.  1995.  “Community Financing For Health Care. A Case Study from Bolivia.”  42.   DeRoeck D et al. 1996. “Rural Health Services at Seguridad Social Campesino Facilities: Analyses of Facility and Household Surveys.” 43.   Fiedler JL et al. 1999.  “An Assessment of the Community Drug Funds of Honduras.” 44.   Fiedler JL et al.  2000. “Financing Health Care at the Local Level: The Community Drug Funds of Honduras.”

Case studies – MIXED REGIONS

45.   Ron A. 1999. “NGOs in community health insurance schemes: examples from Guatemala and Philippines.”